The world's largest offshore wind farm has abandoned expansion plans in a blow to the UK's status as a global leader in the industry.

London Array announced it will not go ahead with the second phase of an offshore wind farm, partly because of the time it would take to assess the impact on birds.

The consortium behind the Thames Estuary development said there were "technical challenges and environmental uncertainties" surrounding the site.

There would be a wait of at least three years to assess the potential impact of additional turbines on the habitat of red-throated divers.

The plans drawn up for phase two of the scheme involved an extra 240 megawatts (MW) of power, with an expectation that the final capacity would be closer to 200MW. The first phase of the scheme generates 630MW.

London Array said it had formally requested the Crown Estate to terminate the agreement for lease of phase two and has cancelled the remaining grid capacity it had reserved at a National Grid substation in Graveney, Kent.

General manager Mike O'Hare said the second phase had always been subject to a planning condition requiring London Array to "demonstrate that any change caused by the additional turbines to the habitat of the red-throated divers that over-winter in this part of the Thames Estuary would not compromise its status as a designated environmental special protection area".

He said: " We believe it will take until at least January 2017 for that data to be collected and although initial findings from the existing phase one site look positive, there is no guarantee at the end of three years that we will be able to satisfy the authorities that any impact on the birds would be acceptable.

"In the absence of any certainty that phase two would be able to go ahead, our shareholders have decided to surrender the Crown Estate agreement for lease on the site, terminate the grid connection option, and concentrate on other development projects in their individual portfolios. Our existing operations at Ramsgate and staffing levels are unaffected."

The Department for Energy and Climate Change insisted some "rationalisation" of the offshore industry's expansion plans was to be expected.

An official said: " There are some projects which are potentially reducing size at the moment. The most important thing to say is that's a very natural thing to happen within the sector, it reflects the fact that the industry is maturing and focusing on the most practical projects.

"It reflects the fact that sites are often reduced or not developed given the particular circumstances of those sites, whether they are a very long way in the future in terms of the pipeline, whether they face particular geological or other issues.

"And it reflects the fact that some sites have particular environmental impacts which need to be managed very carefully, for example in the case of the London Array."

Offshore schemes with the potential to produce 41 gigawatts of power by 2030 were in the pipeline, although many of those were in the early "scoping" phase and firms would focus on the "best value projects".

The offshore renewables joint industry programme (Orjip), bringing together officials and the industry, was working on gathering evidence about the impact of wind farms on the environment.

An official said: "T he regulatory environment was set in the late 1970s by Europe, it's based on the precautionary principle. Other people can fight about the politics of that."

But the source added: "The regulations don't specifically say how many birds a wind farm is allowed to kill. But there are people in the planning system who obviously have to have the interest of protecting the environment more generally.

"We need to help provide the best possible evidence to facilitate that process."

Despite the setback, Energy Minister Michael Fallon insisted the UK was a pioneer in the offshore wind industry.

"The UK is the world leader in offshore wind - with more deployed than any other country, and a framework in place to retain our global lead," he said.

"The benefits that offshore wind can bring are clear: as costs fall it can enhance our long-term energy security, reduce our dependence on imports and help reduce our carbon emissions.

"And, crucially, offshore wind can play a vital role in driving growth - adding billions of pounds of value to the UK economy and supporting thousands of jobs."

Renewable UK's Nick Medic said: "The overall project pipeline for UK offshore wind is still healthy, although obviously it's disappointing when projects don't go ahead or are scaled back. We're maintaining our global lead, with more capacity installed in UK waters than the rest of the world put together.

"We have 22 offshore wind farms up and running, five under construction, seven with planning consent and 11 awaiting approval. We've already installed 3,653 MW of capacity - enough to power more than two and a half million homes. We have a further 16,500MW in the pipeline - that's four and a half times as much capacity as we have now."